§ 34-454 — Establishment and use of life cycle cost methods and procedures; definition

A. The director of the department of administration, in consultation with the Arizona commerce authority, shall establish practical and effective present value methods for estimating and comparing life cycle costs for state capital projects, using the sum of all capital and operating expenses associated with the energy system of the building involved over the expected life of the system or during a period of twenty-five years, whichever is shorter, and using average fuel costs and a discount rate determined by the director. The director shall develop and prescribe the procedures to be followed in applying and implementing the methods and procedures established by this subsection.

B. The design of new capital projects and the application of energy conservation measures to existing capital projects shall be made using life cycle cost methods and procedures established pursuant to subsection A.

C. In leasing buildings preference shall be given to buildings which minimize life cycle costs.

D. For the purposes of this section, "life cycle cost" means the total cost of owning, operating and maintaining a building over its useful life, including such costs as fuel, energy, labor and replacement components determined on the basis of a systematic evaluation and comparison of alternative building systems, except that in the case of leased buildings, the life cycle costs shall be calculated over the effective remaining term of the lease.